{"id":8058,"date":"2023-06-22T10:30:00","date_gmt":"2023-06-22T10:30:00","guid":{"rendered":"https:\/\/thezakariagroup.com\/what-homebuyers-need-to-know-about-credit-scores\/"},"modified":"2023-06-22T10:30:00","modified_gmt":"2023-06-22T10:30:00","slug":"what-homebuyers-need-to-know-about-credit-scores","status":"publish","type":"post","link":"https:\/\/thezakariagroup.com\/what-homebuyers-need-to-know-about-credit-scores\/","title":{"rendered":"What Homebuyers Need To Know About Credit Scores"},"content":{"rendered":"
\"What<\/p>\n

If you\u2019re thinking about buying a home<\/a>, you should know your credit score\u2019s a critical piece of the puzzle when it comes to qualifying for a home loan. Lenders review your credit to assess your ability to make payments on time, to pay back debts, and more. It\u2019s also a factor that helps determine your mortgage rate<\/a>. An article from Bankrate<\/em> explains<\/a>:<\/p>\n

\u00a0\u201cYour credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: <\/em>Typically, the higher your score, the lower the interest rates and better terms you\u2019ll qualify for<\/em><\/strong>.\u201d<\/em><\/p><\/blockquote>\n

This means your credit score may feel even more important to your homebuying plans right now since mortgage rates<\/a> are a key factor in affordability<\/a>, especially today. According to the Federal Reserve Bank of New York<\/em>, the median credit score in the U.S. for those taking out a mortgage is 765<\/a>. But, that doesn\u2019t mean your credit score has to be perfect. An article from Business Insider <\/em>explains<\/a> generally how your FICO<\/em><\/a> score range can make an impact:<\/p>\n

\u201c. . . you don’t need a perfect credit score to buy a house. . . . <\/em>Aiming to get your credit score in the \u2018Good\u2019 range (670 to 739) would be a great start towards qualifying for a mortgage<\/em><\/strong>. But if you’re wanting to qualify for the lowest rates, try to get your score within the \u2018Very Good\u2019 range (740 to 799).\u201d\u00a0<\/em><\/p><\/blockquote>\n

Working with a trusted lender\u2019s the best way to get more information on how your credit score could factor into your home loan and the mortgage rate you\u2019re able to get. As FICO <\/em>says<\/a>:<\/p>\n

\u201cWhile many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single “cutoff score” used by all lenders and there are many additional factors that lenders may use to determine your actual interest rates.\u201d<\/em><\/p><\/blockquote>\n

If you\u2019re looking for ways to improve your score, Experian <\/em>highlights<\/a> some things you may want to focus on:<\/p>\n